CBO: The Public Option Could Lead To Premium Increases, Fewer Choices & Less Access

WASHINGTON – As some politicians continue to push for a new government-controlled health insurance system known as the public option, a new report by the non-partisan Congressional Budget Office (CBO) adds to a growing body of research warning of the potential negative consequences of such a proposal, including coverage disruptions and premium increases for currently insured Americans, a reduction in coverage options, and reduced access to care for seniors and low-income families.
 
The CBO’s new report warns of:

• Disruption Of Coverage & Increased Premiums For Currently Insured Americans: “The public option might have a larger effect on sources of coverage for the currently insured than the currently uninsured. If the benchmark premium fell but private premiums did not, subsidized enrollees who remained in their current plan would face a reduction in premium subsidies and an increase in net premiums.”
• Fewer Coverage Choices:“It would probably also cause some private insurers to exit the market entirely, thereby reducing coverage options.”
• Less Access To Care For Seniors & Low-Income Families: “Consequently, providers would be more likely to opt out of Medicaid and Medicare if participation in the public option was tied to those programs.” 

A recent study by Lanhee J. Chen, Ph.D., Tom Church and Daniel L. Heil warns that the costs of a new government-controlled health insurance system like the public option could be even more than originally projected, especially in the event of a future economic recession. Their analysis reveals that this would demand unaffordable tax increases on working families, massive increases to our national debt, or a combination of both.
 
Today, our health care system is working together to expand access to care, and “[u]ninsured rates for young adults almost halved from 2011 to 2018, while the share of those covered by Medicaid increased over the same period due in large part to the Affordable Care Act expansion of the program, according to a new report from the Urban Institute …The report says those changes were most concentrated from 2013 to 2016, when most ACA coverage provisions including Medicaid expansion were implemented,” and “[i]n states that did choose to expand Medicaid coverage, uninsurance rates fell more dramatically for the 19-25 age group than rates in states that did not expand,” POLITICO reports.
 
A new analysis by the Kaiser Family Foundation (KFF) finds that “the number of people eligible for a subsidy to purchase Marketplace coverage has increased 20 percent from 18.1 million to 21.8 million with passage of” the American Rescue Plan Act (ARPA), while “the majority of uninsured people (63 percent) are now eligible for financial assistance through the Marketplaces, Medicaid, or Basic Health Plans. In fact, more than four out of 10 uninsured people are eligible for a free or nearly free health plan through one of these programs.”
 
The Associated Press reports that ARPA represents “the biggest expansion of federal help for health insurance since the Obama-era Affordable Care Act,” and separate steps are already underway to reopen federal health care marketplaces, eliminate ineffective red tape that can prevent Americans from accessing coverage options and urge the Supreme Court to uphold the Affordable Care Act.

At a time when our health care system is working together to help Americans get healthy and stay healthy, the time has never been better to build on and improve what’s working – where private coverage, Medicare and Medicaid work together to expand access to coverage and care – in order to lower costs, protect patient choice, expand access, improve quality and foster innovation.